Mendez Hospital showed the following major hospital costs at various levels of activity for CY 2020: Month Hospital Admission Major Hospital Cost(P) February 1,300 P850,000.00 March 8,500 P1,350,000.00 April 1,600 P1,150,000.00 May 1,400 P950,000.00 June 1,200 P800,000.00 July 200 P50,000.00 August 1,650 P1,200,000.00 September 1,550 P1,050,000.00 The breakdown of the major hospital costs in the month of May at 1,400 hospital admission is as follows: Accommodation Expense (Variable) P400,000.00 Utilities (Fixed) P300,000.00 Medicine (Mixed) P250,000.00 Total Overhead Cost P950,000.00 Requirements: Determine how much of major hospital cost for the month of August of P1,200,000.00 consisted of medicine cost Using high-low method, determine the cost function for Medicine Using high-low method, determine the cost function for major hospital cost What would be the total major hospital cost if hospital admission is at 2,000?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mendez Hospital showed the following major hospital costs at various levels of activity for CY 2020:

 

Month

Hospital Admission

Major Hospital Cost(P)

February

1,300

P850,000.00

March

8,500

P1,350,000.00

April

1,600

P1,150,000.00

May

1,400

P950,000.00

June

1,200

P800,000.00

July

200

P50,000.00

August

1,650

P1,200,000.00

September

1,550

P1,050,000.00

 

 

 

 

 

 

 

 

 

 

The breakdown of the major hospital costs in the month of May at 1,400 hospital admission is as follows:

Accommodation Expense (Variable)

P400,000.00

Utilities (Fixed)

P300,000.00

Medicine (Mixed)

P250,000.00

Total Overhead Cost

P950,000.00

Requirements:

  1. Determine how much of major hospital cost for the month of August of P1,200,000.00 consisted of medicine cost
  2. Using high-low method, determine the cost function for Medicine
  3. Using high-low method, determine the cost function for major hospital cost
  4. What would be the total major hospital cost if hospital admission is at 2,000?
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